Research firm iSuppli has discovered the iPhone 3G costs just $174.33 in pure manufacturing costs, less than what it look to build the original first generation iPhone, according to an article that appeared on appleinsider.com.
In fact, according to iSuppli, the iPhone 3G cost Apple $53 less to manufacture than the last version of the iPhone, despite the inclusion of chips for 3G data and GPS capabilities.
The cost of materials does not include shipping the phone, selling it, or creating the software for it, but iSuppli said that the cheap design is part Apple’s short-term goal to establish a large market share early in the iPhone’s history, according to Apple Insider.
The new iPhone 3G has many of the same parts as the previous model, including the Samsung processor. Apple also saves money by using one durable circuit board versus the two tightly connected ones featured in the old iPhone, according to the article.
About $50 in licenses for patents and intellectual property is factored into the price, as well as an assumed unsubsidized cost of $499 for an 8GB model of the phone.
Apple, however, is thought to be getting as much as $300 in subsides from AT& T (the service provider for the iPhone in the United States) for every costumer that buys the device for the $199 price. That works out to about 55 per cent profit margin before accounting costs for marketing and software, according to Apple Insider.
For those Canadians baffled by the plans Fido and Rogers are offering for the iPhone 3G, I thought I’d offer some perspective by posting what AT&T is charging Americans for purchasing and using the iPhone 3G:
$69.99 for 450 voice minutes, unlimited data and 5000 evening and weekend minutes
$89.99 for 900 voice minutes, unlimited data and unlimited evening and weekend minutes
$109.99 for 1350 voice minutes, unlimited data and unlimited evening and weekend minutes
$129 for unlimited voice, data and evenings and weekends.
Unlimited text can be added for $20/month, $15 for 1500 messages or $5 for 200.
People who have purchased an iPhone before the 3G release will be able to upgrade for $199 (8GB) or $299 (16GB). The iPhone 3G (without the upgrade) will cost AT&T customers $399 for the 8GB model or $499 for the 16GB model. Both phones require a new two-year service agreement with one of the plans mentioned above. AT&T have said that a no-commitment version of the phone will be released, but not until after the initial launch. The no-commitment phones will cost $599 and $699, according to an article that appeared on www.engadget.com.
While the American version of the plans for the iPhone look better than the Canadian ones, consumers will still have to fork over a ton of cash for this techno-gadget. Even on the cheapest plan, users will be paying close to $850 a year to use their phone, and that’s not even including text messaging. That being said, AT&T customers on the ‘cheap plan’ get a lot more than Rogers customers on the comparable plan, which costs only $10 less a month. The cheapest Roger’s plan, at $60/month, offers 150 anytime minutes, 75 outgoing SMS, and 400 MB data, free evenings after 9pm.
